TMI Blog1990 (10) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... the meaning of Rule 57A of the Central Excise Rules, 1944 for eligibility to MODVAT credit. Shri P.C. Anand, Ld. consultant for the appellant submits that plaster of paris mould has no shelf life and for every ceramic insulator one needs a specific plaster of paris mould and, therefore, the same cannot be construed to be either a tool or an appliance for denying the appellant the benefit of Modvat credit. The Ld. consultant also referred to the ruling of the Supreme Court in the case of Andhra Pradesh Paper Mills v. Collr. of C. Ex., Guntur and contended that so long as it can be shown that the materials used as inputs have a nexus with the process which is integrally connected with the ultimate production of goods till the same are fit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruling of the Supreme Court, in our view, has no application to the facts and circumstances of this case and more particularly for considering a question as to whether plaster of paris moulds could be an input within the meaning of Rule 57A. In our view the moulds are not integrally connected with end-product in question and such moulds are used only as a tool or appliance for bringing about a change in the clay. Therefore, following the ratio of the Bench ruling cited supra, we uphold the impugned order appealed against and dismiss the appeal. (Pronounced in the open Court). 4. [Assent per : V.P. Gulati, Member (T)]. - I agree with the conclusion that MODVAT credit as claimed by the appellants is not admissible for the reason that the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The sand moulds, it has been pleaded, after their use only once, are broken after the iron castings get formed and for that reason these should be treated as intermediate goods. The point to be considered is whether the sand moulds can be considered as intermediate goods and whether by themselves these are one of the excluded category in respect of which the input credit relief under Rule 57A is not available. It is observed the term intermediate goods" has not been defined in the Rules and has to be understood in the context in which the term intermediate goods is used in the trade. The general understanding of the term intermediate goods is that these emerge in the manufacturing stream of a product as something which on further bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as it can be shown that the materials used as inputs have a nexus with the process which is integrally connected with the ultimate production of goods till the same are fit for being put in the marketing stream and such process is so integrally connected with ultimate production of goods that it would be commercially inexpedient to produce the finished goods without that process, all such inputs would get the benefit of credit of duty. It is observed that the stress is on the processes which are integrally connected with the production of the goods. Therefore, for the items to pass the test of eligibility to the benefit of the MODVAT credit will be such that they participate in the process of manufacture without which the end product cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the finished product. Generation of steam which ultimately participates in the manufacturing process is one such item. The other may be pre-treatment of the raw material which go into the manufacturing stream or the materials which may be used for making the end product ready for marketing. The use of the materials has to be such that they carry by their participation, in the manufacturing stream the process of manufacture a step further". In that case we have also considered the question of use of inputs in the machines, machinery, etc. which are employed in the manufacturing process of a specified finished product and have held that the specified inputs going into the machinery, equipment tools etc, would not be eligible for the be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above, we hold that the inputs used in the manufacture of sand moulds, which are by themselves in the nature of tools or apparatus, have to be held to be used in the manufacture of the sand moulds and not in or in relation to the manufacture of the castings. The appellants are also not eligible for the benefit of Rule 57D, as the sand moulds do not qualify to be intermediate goods for the reasons given above. 6. The West Regional Bench in the case of Shivaji Works Ltd. v. Collector of Central Excise Sholapur - reported in 1990 (50) E.L.T. 50 (Tri.) = 1990 (29) ECC 139 (WRB) has held that chemicals used in the manufacture of sand moulds which are in the nature of equipment are not eligible for the Modvat Credit under Rule 57A of the Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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